Court upholds rejection of tax declaration under Kar Vivad Samadhan Scheme, emphasizing scheme compliance and prohibiting manipulation.

The High Court dismissed the writ petitions, upholding the rejection of the declaration under the Kar Vivad Samadhan Scheme. The court ruled that the tax arrears were not outstanding as of the required date, the appeal was not competent, and the issuance of the certificate was contingent on meeting scheme prerequisites. Allegations of connivance and artificial pendency to benefit from the scheme were rejected. The court emphasized adherence to scheme requirements and prohibited manipulation for scheme benefits, ordering a refund of the tax paid by the petitioner.

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Issues:
1. Validity of rejection of declaration under the Kar Vivad Samadhan Scheme based on tax arrears determination date.
2. Applicability of the Kar Vivad Samadhan Scheme in cases where no appeal is admitted and pending.
3. Interpretation of provisions regarding issuance of certificate under section 90(2) of the Act.
4. Allegations of connivance and creation of artificial pendency to benefit from the Kar Vivad Samadhan Scheme.

Issue 1: Validity of rejection of declaration under the Kar Vivad Samadhan Scheme based on tax arrears determination date:
The petitioner filed a declaration under the Kar Vivad Samadhan Scheme, 1998, for tax arrears of Rs. 4,159. The designated authority rejected the declaration, stating that the tax arrears were not outstanding as of March 31, 1998, as required by the Act. The court upheld this decision, citing the definition of "tax arrear" under section 87(m) of the Act, which includes amounts determined on or before March 31, 1998. Since the demand was determined in December 1998, the rejection was deemed valid.

Issue 2: Applicability of the Kar Vivad Samadhan Scheme in cases where no appeal is admitted and pending:
The court examined whether the scheme applied when no appeal was admitted and pending. The Act specified that the scheme did not cover cases where no appeal, reference, or writ petition was admitted and pending before the appellate authority. In this case, the petitioner's appeal was not admitted, rendering it incompetent. The court referenced relevant legal provisions and case law to support this interpretation, ultimately concluding that the appeal filed was not competent and, therefore, did not make the petitioner eligible for the scheme.

Issue 3: Interpretation of provisions regarding issuance of certificate under section 90(2) of the Act:
The petitioner argued that once the authority determined the payable sum under section 90(1) of the Act and it was paid within the stipulated period, the authority must issue the certificate under section 90(2) of the Act. However, the court disagreed, stating that fulfilling the basic prerequisites of the scheme was essential. The court clarified that if a declaration was not covered by the scheme, any tax paid would be refundable, making the provisions of section 93 of the Act inapplicable.

Issue 4: Allegations of connivance and creation of artificial pendency to benefit from the Kar Vivad Samadhan Scheme:
The court noted allegations of connivance between the petitioner and department officials to create a demand eligible for the Kar Vivad Samadhan Scheme. It highlighted discrepancies in the timing of the demand determination and raised concerns about the authenticity of the appeal filed. Citing relevant case law, the court emphasized that creating artificial pendency to benefit from the scheme was impermissible. Ultimately, the court found no fault in the authority's rejection of the declaration and ordered a refund of the tax paid by the petitioner.

In conclusion, the High Court dismissed the writ petitions, ruling in favor of the designated authority's rejection of the declaration under the Kar Vivad Samadhan Scheme. The court emphasized the importance of adhering to the scheme's prerequisites and highlighted the impermissibility of creating artificial pendency to avail scheme benefits.

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